Insurance CEOs are feeling rather bullish. Indeed, in a recent global survey of insurance CEOs conducted by KPMG International, 91 percent of CEOs said they were confident in their company's 3-year growth prospects (up from 79 percent last year). Eighty-three percent voiced confidence in the industry's overall growth prospects (versus 62 percent last year).
While this confidence is certainly good news, I wonder if insurers are actually moving fast enough - or boldly enough - to achieve real growth over the long term.
Our data also suggests insurance CEOs are worried. In our survey, almost two-thirds said they were feeling overwhelmed by the lead times required to achieve significant progress on transformation. A third admitted their organization is struggling to keep pace with the rate of technological innovation in their sector.
Many insurers are making transformational changes. But my experience (and our data) suggests that few are doing it at the scale required to achieve true enterprise-wide impact. When I talk to insurance CEOs, they are often quick to share their innovative pilot projects and capabilities. But they seem to struggle with how to leverage these new technologies and capabilities across the enterprise.
Insurance leaders recognize the challenge; 47 percent of the CEOs in our survey told us that most of their technology investment is tactical - focused on solving today's business challenges - rather than strategic and focused on a long-term plan. And in a separate survey of insurance CIOs conducted by KPMG International and Harvey Nash, just 28 percent said they had a clear enterprise-wide digital business vision and strategy.
Fundamentally, this comes down to the age-old challenge of balancing cost against growth and risk against opportunity.
Insurers know they need to transform in order to grow in the future, but they hesitate to disrupt their current books of business or business models. They seem to want to implement new technologies across the enterprise, but aren't yet willing to tear out their legacy systems and rethink their IT estate. They also seem keen to capture new capabilities and skills, but are slow to hire until they see positive growth. Every insurer struggles to find the right balance.
Yet, in my view, finding that balance will be the defining challenge facing insurance CEOs over the coming decade. And it will permeate almost every decision they make as they work to execute (and, where necessary, pivot) their transformation journeys.
Over the next few weeks, I plan to use the data from the CEO survey to dig deeper into this challenge. I'll look at how this balancing act is playing out in key areas such as customer experience, digital transformation, workforce planning and partnering for innovation. I'll also provide some useful tips and insights that I've picked up over the past few years of working with leading insurers and thought leaders.
Ultimately, I hope this 'mini-series' of blog articles encourages insurers to think bigger about their transformation journeys and helps them find the right balance between cost and growth, risk and opportunity. Their future success may depend on it.